Plot to Decimate Small Importers to Sustain Conglomerates in T&T Exposed!
Crushing Small Businesses can become a primary objective when a small economy like T&T’s starts to slow down. Big businesses can, and do, squeeze smaller ones out of the market. This can happen through predatory pricing strategies, exclusive distributorship arrangements and even through lobbying local and state governments to increase the barriers to entry in the industry. Big businesses are the Goliath to the small business David. In the modern business world, David rarely wins.
The Conglomerates often have the power to affect legislation and taxing structures because of their deep pockets. Frequently, that means that they can have lobbyists on the payroll making sure that any pending legislation is favorable to their industry and their company. Large corporations can have a huge impact on the law and on elected government officials who rely on their money at election time. Sometimes, corporations can even enter government agencies indirectly. The contention here is that with the onset of globalization, anyone that has a Credit Card and a Sky Box address can be an importer. Hence when a conglomerate has a large portion of their businesses tied into the retail sector, the small businesses collectively become a big threat, since they will be able to compete favorably over the big business.
This can happen because large online retailers put on very slim margins on their products thereby defeating “economies of scale” purchases that would have worked in the past for the big business. Additionally, the small businesses will not have the heavy burden of large overheads due to the numerous management and accounting staff.
But the elimination of the small businesses will seriously hurt the economy, slow development and create extensive unemployment. It needs to be understood that the main objective of big businesses is taking Profits out of the economy. A corporation’s main goal is to provide a profit to its shareholders. On the other hand in a small company’s growth cycle, profits are often plowed back into company coffers to fund expansion, but a large, mature company siphons profits off to pay dividends to shareholders. Most shareholders retain those dividends in investment portfolios rather than spend them, so they don’t have a stimulative effect on the economy. Local communities often do not benefit from having large corporations operate in their area.
The First Video
In this video the Minister of Finance Mr Colm Imbert is being questioned about the proposed 7% Tax on Online Purchases. For most of this hour long interview, it seemed like Mr. Imbert was schooling the host, and was forcefully blunt and full of dismissive quips. But one searching question about the survival of small and medium sized businesses seemed to stun and take him by surprise:
The host indicated that a large portion of small and medium businesses depend on using online purchases to supply their operations with goods and raw materials, yet this is passively dismissed as a non-issue since they will be competing with what is being manufactured locally. So since when did we start to manufacture Cellular phones, Computers, Tablets, Flat Screen TVs and other commonly imported items in T&T, Mr. Imbert?
It appears that this 7% tax will instead give the conglomerates the ‘wiggle’ room to bully the small businesses out of the market. This will occur as they will use ocean shipping with containers of items that would not be classified as online purchases, thereby giving them an additional 7% advantage over smaller businesses that use the couriers.
The Second Video
In this video the President and CEO of the Massy Goup seems to be elated about the imposition of the 7% tax on Online Purchases. He sees it as causing “great opportunities to arise” and will have a “positive impact on the country”. His deep concern for the usage of foreign exchange however does not extend to the vast amounts of motor vehicles that his group imports.
The puzzling part of Mr. Warner’s contribution is the ‘frustration’ that the commercial banks are experiencing because of the high volume of credit card transactions that they are forced to process. These poor and overburdened banks receive about 3% of every transaction off the top. Over the last three years this amounted to US$1.8 billion, 3% of that gives you the paltry sum of US$54 million, for doing next to nothing. Additionally if the balance on your credit card is not paid off within 30 days, the outstanding balance is automatically converted into a 24% interest loan. I don’t think that the banks are shedding any tears concerning this arrangement.
The Third Video
Here the CEO of the American Chamber correctly identifies the proposed 7% Tax on Online Purchases as a ‘Nuisance Measure’ and states that it will primarily serve to irritate the population. He also clearly articulates that it will not achieve its objective. But rather, it will cause more persons to become tax evaders, since that may become their only option for survival where there is an unbalanced playing field where the big companies will be playing with a different set of rules.
Therefore it appears that this 7% Tax on Online Purchases was devised in the boardroom of some conglomerate that is simply not prepared for globalization. As a result, it wants a tax haven where it will be able to get an advantage over small and medium sized businesses. The objective being to crush them and then suck money of out the economy so that their shareholders will be satisfied. The implementation of this tax will only serve to destroy small businesses, create more unemployment, and stifle the growth of the economy.
With the widest consideration, we should not destroy the many in order to serve the needs of the few, especially when they are not designed or configured for this modern age. Dinosaurs may have been big, but because they could not have adopted, they became extinct. No need to extend the inevitable at everyone’s expense.